Oil traded near $46 a barrel as crude production rebounded in Libya, an OPEC member exempt from output kerbs.
Futures gained 0.3 percent in New York after sliding 1.1 percent Monday. Libya has increased output to 1.1 million barrels a day, according to a person familiar with the matter. The country will attend a meeting with some OPEC members as well as Russia to share its production plans. The output from major U.S. shale plays will reach 5.58 million barrels a day in August, an all-time high, the Energy Information Administration said in a report.
According to Bloomberg report, Libya has increased output to 1.1 million barrels a day, according to a person familiar with the matter. The country will attend a meeting with some OPEC members as well as Russia to share its production plans. The output from major U.S. shale plays will reach 5.58 million barrels a day in August, an all-time high, the Energy Information Administration said in a report.
Libya, exempt from a deal between the Organization of Petroleum Exporting Countries and its allies to shrink a glut, is boosting production as prices in New York languish below $50 a barrel on concern ample global supplies will offset OPEC’s kerbs. That’s at a time of the year when demand for gasoline typically increases as Americans take more driving vacations during the summer.
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“The big problem is Libya,” Torbjorn Kjus, an analyst at DNB Bank ASA, said, adding that the country has added more than half a million barrels a day of output since April. “That’s much more important on the fundamental side than the shale production.”
West Texas Intermediate for August delivery was at $46.17 a barrel on the New York Mercantile Exchange, up 15 cents, at 10:54 a.m. in London. Total volume traded was about 10 percent above the 100-day average. Prices dropped 52 cents to $46.02 a barrel Monday.
Brent for September settlement added 19 cents to $48.61 a barrel on the London-based ICE Futures Europe exchange. The contract on Monday fell 1 percent to $48.42. Prices climbed 4.7 percent last week. The global benchmark crude traded at a premium of $2.24 to WTI.
Related report: Nigeria, Libya may be asked to cap crude output later this month, says Kuwait oil minister
Libya will participate in a technical meeting with fellow OPEC members as well as Russia in St. Petersburg on July 22 to share the “factors enabling and constraining Libya’s production recovery,” Mustafa Sanalla, chairman of the National Oil Corp., said Tuesday. OPEC member Kuwait last week said Libya and Nigeria, another country exempt from cuts, may be asked to cap their oil output amid worries about their improving productions.
Citigroup Inc. cut its oil-price forecasts for this year and next as Libya and Nigeria restore previously halted supplies and as American production climbs. It reduced projections for both Brent and WTI crudes in the second half of this year by $7 a barrel, predicting averages of $55.50 and $52.50, respectively.
Oil market news:
- Crude inventories in the U.S. decreased 3.6 million barrels in the week ended July 14, according to a Bloomberg survey before government data due on Wednesday.
- OPEC member Ecuador said it will start to increase its own crude output to increase revenue, a blow to the group’s unity, barely two months after it extended a deal to kerb its oil output until the end of March.
- U.S. President Donald Trump said the U.S. will “not stand by as Venezuela crumbles”